In every financial market and for that matter financial crisis from the stock market collapse, to the housing bubble bursting, there’s always the first domino to fall. It’s something or someone that you usually don’t put much stock into at the time, but when you are finally able to rip open the series of events leading to said crisis, it’s the first thing you would change or usually stop, Butterfly Effect be damned. You see, no matter what, over time, the market recovers, or at least, changes.
Professional sports bettors, and when I use that term, I’m talking about the elite of the industry. I’m talking about syndicates from around the world who’s tactics mirror that of a full blooded hedge fund and capital ventures firm, and the actual soloprenour professional sports bettor. That type of sports bettor is successful because above all else, they know how to navigate the market.
You see, there’s that word again, market.
Let’s dig into that for a second:
1. A regular gathering of people for the purchase and sale of provisions, livestock, and other commodities.
2. The state of trade at a particular time or in a particular context.
3. The free market; the operation of supply and demand.
“Future development cannot simply be left to the market.”
Just how powerful do those definitions sound when we talk about sports betting? It really is the true definition of a market. Aside from the first definition, which I guess we could start calling sports books sports markets, let’s take a look at the rest:
2. The state of trade at a particular time or in a particular context.
This is the definition of getting the best available number. The state of the bet, at the price at the exact time, locked in, and if you got a better price than the final number, you’re halfway there in becoming the true definition of a “Sharp.”
3. The free market; the operation of supply and demand. –“Future development cannot simply be left to the market.”
Supply and demand. A tale as old as time right? If the general public has a huge demand on a favorite, the number is inflated due to liability and you have to pay even more, or what’s known as a premium, to purchase that bet.
What I really want to talk about and dig into here, is that last part. I can’t believe that example was actually in there, because there is no better way I could ever explain to you what could possibly happen soon than, “Future development cannot be simply left to the market.”
If you’re wondering where I’m going with this, I just had to make you understand the concept and true definition of the market when it comes to sports betting before we could move on. If you haven’t taken the time to read one of the best pieces of sports handicapping related content I can remember coming across in years, How former ref Tim Donaghy conspired to fix NBA games, by Scott Eden of ESPN Chalk, I need you to start there. Don’t worry, I’ll wait for you, but you need to finish that article to truly understand the type of impact and chain of reaction started.
Remember how I talked about the first domino? Meet Tim Donaghy.
One piece of content really stuck out to me in regards to his ability to fix games:
The reason this is so powerful is because it shows the limitations even a referee, or judge, or regulator, moderator, or whatever you want to call it has on manipulating the market. The referee making calls to influence his own wager can only reasonably expect to be able to manipulate the market about six points either side. I’m not saying that isn’t an extreme amount, especially in the efficient market of odds making, but it just goes to show you that one, they probably had to stick with closely lined games from around six points and under, and two, even someone literally moving the market at will has their limits.
Now, let’s take a look at the reaction of said market manipulation:
Scott Eden, while talking about his brilliantly written piece, goes on to say, “Its like a financial market, and like a financial market, it needs to be regulated-not by the participants. You can’t have a Goldman Sacks regulating itself, it needs to be an outside body.”
Sound familiar? That’s because it’s right there in definition number 3 of a market, “Future development cannot simply be left to the market.”
I hate to skip around on you, but I need to table that for one second, because I’m getting to the second domino, which of course, is the repeal of PASPA and the legalization of sports betting across America.
New sports bettors are under the impression that this is a new market, which frankly isn’t the case. The sports betting market, wether it be in Las Vegas or the online sports betting offshore world has been up and running with the efficiency second to none. Yes, I consider the sports betting market more efficient and moves more appropriately than the stock market, mainly because in the stock market, insider trading is illegal. In the sports gambling market, insider trading is not only legal, but encouraged. Not to the tune of Donaghy, but different examples include, finding a player injuries status before an oddsmaker, personal problems with a star athlete who would influence the spread, and all the way down to word of mouth.
Think of it like this, the general public is operating under the same assumption that the stock market is brand new after it was only available either offshore or in New York only.
The markets operating around the world currently are to put it basic, fine. They don’t need tweaking. No market needs an overseeing commission of how handicappers are placing their bets. This would literally be opening the door to be persecuted and arrested for making bets via insider information. For example, your family friend plays on an NCAA basketball program and took up partying a bit too much prior the night before a big game, and you know it, because you were with him, or talked to him. He doesn’t want to play, may “sprain an ankle.” off the tip. In theory, if you have a legal outlet and placed a large wager on the other side, is someone going to audit you and ask, “Why?” Are you going to have to come up with a write up and explanation for every bet you make incase an “outside body” deems it necessary for you to be investigated? Remember, according to just about everyone, “The future development cannot simply be left to the market.”
Yes, that’s an extreme example, and just like the stock market, The SEC is not likely to come after a small trade you made off a buddies tip about a juice company IPO. But if you’re a legitimate gambler using this as your livelihood, if this continues, the market could drastically change. Imagine having to get approved before placing a bet.
Now, let’s make another comparison that is often out there, “I don’t know anything about stocks, but I have an advisor or broker.” Can’t I do the same for sports betting and plead ignorance?
Meet domino number three, American Greed.
Whenever a new market is available to the general public that was once closed off, it means a few things. One, is that there is a whole bunch of new money about to be injected into the market. Two, it means that people don’t know how to navigate the market yet and in theory if smart, would look for help in doing so. Here’s why this amuses me. Sports betting was long looked at as such taboo, something of a back alley deal for degenerates, addicts, and the lowlife alike. If you were a bookmaker, you were looked at similar as a drug dealer who is possibly taking food out of children’s mouths by taking bets from parents. A bookmaker was taking advantage of an addiction the same way a drug dealer was thought to. For a long time, there was no concept of “market” or actually making a living betting on sports. That being said, with books trying to form their new markets, they are literally copying tactics from bookmakers and using their blueprints that they once loathed.
But just like the inception of medical marijuana, once it’s accepted by pop culture figures and brought to the front, it becomes accepted. Truthfully Bill Simmons probably deserves the most credit for being the first to talk about sports gambling openly along with Scott Van Pelt for doing the same. The rise of podcasts also played a part in giving anyone a voice to talk about anything-without network restraints or politically correct approval.
With new markets popping up all over The United States, much like The online poker boom and more specifically because it’s legal, The DFS boom, anyone who is looking to dip their toes into the sports gambling waters is going to look for content providers. After all, the terminology of a sports gambling alone can be overwhelming, “Yeah give me 165, but I wanna buy the hook for the -20 to win a dime please.”
Enter present day. Companies and content providers are popping up almost daily. Hell, there is a nationally broadcast television show on FS1 about what to bet on every day. The next step may be a full blown sports betting channel covering the market the way CNN covers Wall Street. The Action Network just received 17.5 MILLION dollar investment from Fertitta Capital, Philadelphia 76ers owners, and more, which went public during the time of me writing this article:
What you are literally watching live, is money being placed into the market, but not even on bets, but for content providers or advisors. I haven’t even gotten to tout handicappers, which provide even cloudier issues, because unlike a stock broker, there is no sports handicapping school. We’ve also entered the time of social media influencers, or in this game social media handicappers and content providers that can sway and tell people where to put their money and what side.
I’m not trying to have a get off my lawn moment, I’m really not. More people enjoying this type of product is only good for things as it means more jobs, more viewers, which seems like a win/win. I would just caution you that just because someone is a sports analyst, doesn’t make them a sports handicapper, and I think for good reason new providers are not going to fully explain the difference, which is massive. Point spreads and money line bets are not even close to the same thing in a world where professionals are willing to move woman and children over a half point. I simply want to illustrate that you’re watching in real time daily the market evolve and literally form in some places, remain steady and unchanged in others, and if it ever goes sour, you can point to the very beginning dominos that started it.